TPP – it’s about more than just rice

TOKYO (majirox news) — Japan’s possible membership of the Trans-Pacific Partnership (TPP) has produced fear of the possible consequences of the elimination of tariffs on agricultural products. Another cause for concern is the possible effect that the TPP may have on Japan’s healthcare market.

One fear is that American healthcare management organizations (HMOs) be allowed to operate in Japan, managing hospitals and other healthcare facilities as private-only facilities. Though the Japanese system undoubtedly has flaws, the state insurance scheme ensures that universal healthcare is available at a reasonable cost to the patient, and it is seen as a national asset that should not be changed.

Japan’s laws governing ownership of healthcare facilities may need change. Currently hospitals and clinics must be managed by physicians and run as not-for-profit operations. Even though this, together with tight regulation, has helped to keep costs down (a neck MRI scan costs $98 in Japan, compared with the US’s $1,500), commercial HMOs not bound by the not-for-profit rule could, paradoxically, help to drive down costs to patients though economies of scale and other factors, and drive up the quality of care by allowing for more reinvestment in facilities.

Another TPP-related fear is of Japan being forced to accept a more open market for foreign (chiefly American) pharmaceutical products, a move seen as counter to the interests of Japanese pharmaceutical companies, as well as to those of Japanese patients. This fear is not only Japan’s – the New Zealand public health system, in particular the pharmaceutical purchasing operation, Pharmac, is being vigorously defended by the New Zealand government in much the same terms as are expressed by Japanese leaders.

“Our public health system is not up for negotiation,” commented New Zealand Health Minister Tim Groser, a view echoed by Japanese Prime Minister Noda’s words, “We will stand firm to protect our country’s system.”

A confidential document has come to light, somewhat deceptively entitled entitled “Annex on Transparency and Procedural Fairness for Healthcare Technologies.” This can be interpreted as effectively seeking to take away the power of government programs to set the purchase price and to drive lower-cost generic pharmaceuticals out of the market (recommendations that do not form part of the current US healthcare system). Again, though Japan’s current system contains flaws, high costs of pharmaceuticals are not among them, and the principles put forward in this Annex would appear not to be in Japanese patients’ best interests.

Whether or not this is the true aim of the document, it adds fuel to the suspicions of some Japanese commentators that the TPP is an attempt by the US to impose its wishes on the other members of the TPP in areas which are not part of a free trade agreement, and may actually be injurious to the populations of the affected countries.

Noda and his negotiating team should be looking with careful eyes at the documents put before them in the negotiations, and be prepared to dig in their heels at any proposals that would be to the disadvantage of the Japanese people whom they represent.

Hugh Ashton is a resident of Kamakura. He writes for periodical and book publishers in three continents on business and technology subjects, and his recently published third novel, Red Wheels Turning, is now available through Amazon and other major outlets.